I’m releasing this week’s report a little early due to this Thursday’s BrExit vote in the United Kingdom. This week’s economic news has been dominated by the BrExit vote in Britain with huge volatility in gold and global stocks based on nothing but the polling data being released in the UK.
In case you’re not aware, on Thursday, June 23rd the United Kingdom is scheduled to vote on whether to leave the European Union or remain. Thus the terms adopted by the media, “BrExit or Bremain”.
The results of this vote could have a huge impact on the global economies. If they vote to leave the EU, this could be the catalyst for a huge spike in gold and silver stocks and trigger a crash in global stock markets. It would also be the beginning of the end for the European Union.
The European Union was the idea of globalists who wanted to unite Europe as one economy with one currency and eventually one government. The problem was that in Europe, unlike the United States, there are separate governments and separate cultures and once the Union was created, those governments lost the ability to control their own destiny, thereby losing their sovereignty. This was an idea that was destined to fail.
The EU is now on the verge of economic and cultural collapse. The Islamist refugees are destroying Europe’s culture and Europe’s biggest banks are on the verge of a total melt down. Deutsche Bank, Credit Suisse and several Italian and Spanish banks are all teetering on bankruptcy. I would expect a bankruptcy announcement from at least one of these banks in the very near future.
The people of the UK know this and they are tired of being a puppet to the globalist establishment of the EU. But there is so much at stake with this vote that the establishment will pull out all stops to keep a BrExit from happening, including False Flag events, like the assassination of the British politician last week or perhaps even rigging the vote.
You can expect wild swings in the stock and precious metal markets leading up to the vote. This is truly an historical event and the outcome could change the world.
But here is the important part. Regardless of the vote, nothing has changed with regard to the current imploding global economies. They will collapse whether Britain votes to leave or stay. A vote to leave will just speed things along and a vote to stay will just leave us with our current economic trajectory, which is down.
Hold on to your gold and silver positions, we may experience some significant short term downside, but it will be temporary and then things will resume back to the raging bull.
In the daily chart of gold below, you can see that we are still in the consolidation area between the demand and supply zones. The BrExit vote is causing the volatility and depending on the outcome of the vote, we could see a spike up to new highs or a further drop down within the consolidation zone. Either way, it just means we will have to wait and see the results of the vote.
Even if they vote to stay and gold drops down, it will be a temporary pullback before resuming back to the next higher leg in the cycle. Stay calm and hold your positions. Patience is the key to successful trading.
Once gold breaks 1304 and holds; the next major resistance zone for Gold will be around 1400. The rectangular area shown around 1400 on the weekly chart below is known as a ‘supply’ zone because there tends to be more sellers than buyers at this point of resistance. Therefore, I would expect some consolidation within that range to allow energy to build for the next leg higher.
The next major resistance zone after 1400 will be around 1790. That’s a huge upswing from 1400 and once we reach 1400, investors will start to wake up to the fact that gold and silver are in a bull market. I expect precious metal investors to start piling in at that point.
Stock Market: (SPY) (QQQ)
The stock market is currently in limbo and forming a wedge consolidation pattern. I would expect it to break to the downside and resume its down leg into the cycle. The BrExit vote could either encourage that or cause it to consolidate longer. We will know on Friday.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Crude appears to be faltering, but it’s struggling to maintain. I’m not sure how the BrExit vote will affect oil, if at all, but it’s certainly due for a roll over into a cycle low.
Commodities: (FCX) (JJG) (DBA) (JO)
DBA is correcting slightly before its next leg up. If you have positions in DBA and haven’t stopped out, hold for the next leg up. If you’ve stopped out, you might want to wait for the stochastic to drop down a little closer to the mid-point before re-entering your position.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(ABX) January 2017 CALLS
(FNV) January 2017 CALLS
(RGLD) January 2017 CALLS
(DBA) January 2017 CALLS
(JJG) January 2017 CALLS
(SPY) December 2016 PUTS
(IYF) August 2016 PUTS
Stocks, Sterling Slide As Brexit Poll Show Rise In "Leave" Vote
Why A UK Billionaire Believes Brexit Would Be "Good For The UK"
The EU will disintegrate when we leave. They will realise there is nothing left. The political union is going to be a disaster and they'll want a free-trade area. Do you know who'll be the first country invited to that free trade area? The U.K.